The struggle over Minimum Unit Pricing for alcohol has only just begun
- Created on Monday, 21 May 2012 23:13
by David Miller and Claire Harkins
Legal measures setting a minimum unit price (MUP) for alcohol at 50p, which were announced earlier this month, will shortly make their way to the statute books in Scotland. The devolved Scottish Government will make history as the first European administration to introduce such a measure, intended to improve public health. But once the measure is on the statute books the real battle will begin. This is likely to go all the way to the European Court of Justice (ECJ) as the alcohol industry will mount a long-threatened (and planned) legal challenge.
The Scottish Government says it is confident that the bill is compatible with EU legislation; the alcohol industry takes the opposite view. What is clear is that, without an equivalent precedent in the EU, litigation is the only means of securing a definitive answer on the question of legality.
The legal challenge will centre on Articles 34, 35 and 36 of the Treaty on the Functioning of the European Union. (TFEU) Articles 34 and 35 aim to remove barriers to trade, while Article 36 sets out the grounds on which it is legitimate to impose barriers to trade. It is expected that the Scottish government will rely on ‘the protection of health and life of humans.’
In order to justify an exemption under Article 36, the Scottish Government must demonstrate that there is a strong evidence base to support the policy; that the decision was reached by proper process; that the measure is proportionate, and that there is no other less disruptive measure to achieve the same effects.
However, before arguments about the Treaty are aired, it is likely that the first issue to be tested by the industry will be whether the measure is a ‘technical regulation’ or not. The Technical Standards and Regulations Directive 98/34/EC (as amended by Directive 98/48/EC) refers to the specific content of a product, circumstances where a product is prohibited from sale altogether or where state aid is involved in supporting a product. It is intended to eliminate trade barriers and facilitate the free movement of goods and services. This point is important as technical regulations require notification to the European Commission for consultation. Member States and the Commission would then feed their advice and recommendation of how to proceed back to the Scottish Parliament. This could take anything up to eighteen months if a ‘detailed opinion’ is lodged by either the Commission or at least one Member State. In this process, Member States must demonstrate to the Commission how they have accounted for the views of others or why they cannot.
Both the Scottish Law Society and the Scottish Government argue that MUP does not constitute a ‘technical regulation’. However, the alcohol industry in Scotland insists it does, claiming that the Commission shares this view. The Scotch Whisky Association (SWA) has produced correspondence from the Commission in their supplementary evidence to the Scottish Government’s Consultation.
The alcohol industry in Scotland wants the issue referred to the Commission, where they have some powerful allies and could expect to gain a favourable hearing. In this area we will see a determined industry lobbying campaign, both directly by the industry, and by its Trade Associations and lobby groups. The industry will be lead by the Scotch Whisky Association, though producers from across the EU and wider afield will co-operate via the co-ordination role of the Trade Associations. The SWA is routinely active at the European level through its own efforts, those of the big alcohol producers (amongst its members), and through various lobby and policy groups such as the European Spirits Organisation and the European Alcohol and Health Forum, both of which count the SWA as a member.
Direct lobbying will be complimented indirectly via both think tanks and industry-funded bodies. These may include groups that have previously worked for industry or received industry money, such as the think tank the European Policy Centre or specialist consultancies such as Landmark Europe and the Weinberg Group. A further possible avenue of influence for the industry will be via sympathetic government.
Once this issue is resolved debate, will turn back to the Treaty and its tests of proportionality, evidence base and trade disruption. These are set to be the central issues in ECJ hearings. The issue is not whether reducing the harm caused by alcohol should be tackled, but how this should be done. The alcohol industry will undoubtedly claim that other measures could be deployed and try to guide alcohol control back to individual-level solutions, such as alcohol education and interventions targeted at specific groups, (young people, pregnant women and chronic drinkers). They will argue that MUP is untested and will unfairly target the majority of drinkers who use alcohol without negative consequences. Scotch Whisky Association submissions to the Scottish Government already claimed that MUP is untested and not proportionate.
The evidence that supports setting a minimum unit prices rests primarily on the Canadian example and on the modelling work done by ALICE RAP colleagues at the University of Sheffield. We have already seen attacks on the Canadian experiment by the industry and on the Sheffield research by a private research consultancy, the Centre for Economics and Business Research, funded by the supermarket chain ASDA Wal-Mart and by brewers SABMiller. Lobbying efforts have undoubtedly already begun at the European level and these are likely to intensify across Member States and at the European Commission.
The Scotch Whisky Association have been leading the campaign in Scotland to thwart a minimum price for alcohol. The Association has 56 members and is dominated by the large producers, (Diageo, Chivas Brothers, Edrington Group). Gavin Hewitt the SWA chief executive recently took up the role of heading the European Spirits Organisation, where he will have a role in lobbying the Commission, perhaps on minimum pricing.
Ultimately the outcome will depend on the interpretation of Article 36 of the TFEU by the ECJ and of its view of the evidence presented by advocates of public health and by the alcohol industry. However, this is far from a simple legal procedure. At every stage of the process, the alcohol industry will attempt to intervene through its many lobby organisations and by funding research and campaigning which will attempt to defend industry views and interests. It is this ‘web of influence’ that will be key to deciding the fate of the policy announced in Scotland in May 2012.
 Directorate C, Regulatory Policy, of the Enterprise and Industry DG, Guide to the application of Treaty provisions governing the free movement of goods, European Commission, Brussels. Available: http://ec.europa.eu/enterprise/policies/single-market-goods/files/goods/docs/art34-36/new_guide_en.pdf, accessed 17th May 2012
 Health and Sport Committee, Alcohol (Minimum Pricing) (Scotland) Bill: Stage 1, pp 937-938, Scottish Government, Edinburgh, January 31st 2012, pp 937-938. Available: http://www.scottish.parliament.uk/parliamentarybusiness/28862.aspx?r=6853&;mode=pdf Accessed 17th May 2012
 Health and Sport Committee, 2nd Report, 2012 (Session 4) Stage 1 Report on the Alcohol (Minimum Pricing) (Scotland) Bill, Scottish Government, Edinburgh, 7th March 2012, Available: http://www.scottish.parliament.uk/S4_HealthandSportCommittee/Reports/her-12-02w.pdf Accessed 17th May 2012
 Scotch Whisky Association, Supplementary Evidence, Health and Sport Committee, Scottish Parliament, 12 January 2012, p. 48, point 267. Cited in Health and Sport Committee, 2nd Report, 2012 (Session 4) Stage 1 Report on the Alcohol (Minimum Pricing) (Scotland) Bill, Scottish Government, Edinburgh, 7th March 2012, Available: http://www.scottish.parliament.uk/S4_HealthandSportCommittee/Reports/her-12-02w.pdf Accessed 17th May 2012.
 Scotch Whisky Association, Alcohol (Minimum Pricing) (Scotland) Bill Pricing mechanism, Submission to Scottish Parliament, Scottish Parliament, Edinburgh, no date. Available: http://www.scottish.parliament.uk/S4_HealthandSportCommittee/Inquiries/MIN_Scotch_Whisky_Association%281%29.pdf Accessed 21st May 2012.
 CEBR, Minimum Alcohol Pricing: A targeted measure? June 3rd 2009. Available: http://www.cebr.com/Resources/CEBR/PDF%20Documents/Minimum%20Pricing%20Final%20report%20June%202009.pdf